First Solar Sales Weakness to Drag on Peers

First Solar Inc. (Nasdaq: FSLR) is out with its financial results for the fourth quarter of 2012. The solar PV-panel maker said that its net sales hit a record $1.1 billion in the quarter, but the big problem here is that Thomson Reuters was calling for sales of $1.32 billion. Wall Street does not care if that is a gain of $236 million from the third quarter of 2012 and a gain of $415 million from the fourth quarter of 2011. The comparable non-GAAP earnings came to $2.04 per share for the quarter and $4.90 per share for full-year 2012. Thomson Reuters was calling for $1.76 per share for the quarter and $4.61 per share for the year.

The sales gain was said to be primarily due to increased revenue recognition for the Topaz project and from higher third-party module sales. Cash and Marketable Securities at the end of 2012 came to $1 billion and its cash flow from operations was $328 million in the fourth quarter.

First Solar gave guidance for sales of $650 to $750 million with 25% to 27% gross margin, and earnings were put in a range of $0.70 to $0.90 per share. The estimates from Thomson Reuters are $828.9 million in sales and $0.94 per share in earnings. Other guidance is as follows: OPEX of $90 to $100 million; Operating income of $70 to $100 million; Tax rate between 11% and 13%; Cash flow from Operations of $0 to $100 million; and CAPEX of $80 to $100 million.

Shares of First Solar ran up way too much since the election with gains of 50% before backing off of late. The stock was down 4.2% to $31.36 at the close and the after-hours reaction has shares down over 5% more at $29.55 against a 52-week range of $11.43 to $37.18. The Thomson Reuters consensus price target before the effect of earnings and guidance was $26.45 for First Solar shares.

Solar stocks already saw their great growth and stocks are now a mere fraction of their former highs. It is going to be very difficult for these companies to sell themselves as cheap value stocks.